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Rural Development Through Agricultural Commodity Exchanges and Warehouse Receipts

Rural Development Through Agricultural Commodity Exchanges and Warehouse Receipts. Presented at Regional Development Briefing N 0 3 Financing Agriculture in Southern Africa Lilongwe, Malawi, 25-26 th October 2010 By Kristian Schach Moller. BRIEF HISTORY.

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Rural Development Through Agricultural Commodity Exchanges and Warehouse Receipts

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  1. Rural Development Through Agricultural Commodity Exchanges and Warehouse Receipts Presented at Regional Development Briefing N0 3 Financing Agriculture in Southern Africa Lilongwe, Malawi, 25-26th October 2010 By Kristian Schach Moller

  2. BRIEF HISTORY • NASFAM (National Smallholder Farmers’ Association). • Regional sensitisation • Regional Internet trading system was developed. • Defaults eroded the activity • Focusing on farmers • WFP P4P • Warehouse receipts / rural storage & financing

  3. Trades on ACE

  4. Vision • Integrated trading system • Normal trades • Bid volume only (BVO) and offer volume only (OVO) • Warehouse Receipts • Linking small farmers through Urban and Rural warehouse infrastructure • Bringing choice to rural areas • Financing into rural areas.

  5. BVO / OVO • Procurement • WFP and other donors • Local and Regional • Other larger buyers • Govenment • Bringing price discovery, transparency and order to the market. • Mixed reactions from the market

  6. BVO provides a demand • Testing linking small farmer groups to the BVO market. • If a trader is happy with X price; then so will a farmer association. • Problems with quality • Without a proper structure – not sustainable. • NGOs organisaing farmers should focus on this.

  7. Creation of an Indemity Trust • Self owned entity with 2 objectives: • Build rural storage • Underwrite the WRS • Build 1000 MT rural silos • In a surplus producing area • NASFAM will manage silos • Revolving fund

  8. Justification • Post havest loss • Choice – store/financing or sell • Farmers keep ownership • Benefit from price increase • Commodity stay in local area • Revolving fund – 5 to 1 • NASFAM into storage and handling • ACE trade WR and increase volume

  9. THANK YOU Remember to look at www.aceafrica.org

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